Synthon BV v Smithkline Beecham plc (Case C-452/06) [2008] E...

Facts

• The case concerns the application of state liability under EU law in the context of supplementary protection certificates (SPCs) for patented products.
• Synthon BV challenged the granting of an SPC by a national authority to Smithkline Beecham plc, which was later found to be invalid.
• The dispute centered on whether the grant of the invalid SPC, which extended patent protection, caused damage to parties such as generic pharmaceutical companies.
• The judgment examined the conditions under which a Member State could be held liable for such damages under EU law, referencing the Francovich case.
• The Court of Justice of the European Union (CJEU) considered the decision-making process of national courts and authorities in granting SPCs and the direct economic consequences for affected parties.

Issues

1. Whether state liability arises under EU law when a national authority grants an SPC later found to be invalid.
2. What constitutes a "sufficiently serious breach" by a national court or authority in the context of SPC regulation.
3. How to establish a direct causal link between the grant of an invalid SPC and the damage suffered by affected parties.
4. Whether the mere invalidation of an SPC automatically triggers state liability.

Decision

• The CJEU held that a manifest error of assessment by a national authority regarding the application of the SPC Regulation can constitute a sufficiently serious breach, potentially triggering state liability.
• The mere fact that an SPC is later found invalid does not automatically establish a sufficiently serious breach.
• State liability depends on whether the national authority's conduct was manifestly contrary to the provisions of the SPC Regulation at the time of the grant.
• The injured party must demonstrate a direct causal link between the grant of the invalid SPC and measurable damages, such as lost profits.
• National courts possess a margin of appreciation in technical matters but may be liable if they exceed this discretion by making manifest errors.

Legal Principles

• State liability for breaches of EU law applies where the rule infringed confers rights on individuals, the breach is sufficiently serious, and there is a direct causal link between the breach and the damage.
• A "sufficiently serious breach" in the context of SPCs requires a manifest error of assessment by the national authority.
• The mere invalidation of an SPC is not enough to trigger state liability; the conduct of the authority at the time of the grant is decisive.
• National courts must balance their autonomy in interpreting patent law with the uniform application of EU law and the SPC Regulation.

Conclusion

The CJEU clarified that state liability in the context of erroneously granted SPCs requires a manifest error of assessment by a national authority, not just subsequent invalidation of an SPC. Claimants must prove both a sufficiently serious breach and a direct causal link to damages suffered, thus reinforcing consistent application of EU law and legal certainty in pharmaceutical patent protection.